Wellness Programs: Gaps In Guidance

Last week, the federal DOL issued HIPAA regulations on wellness programs setting forth both restrictions and requirements.  The regulations were issued pursuant to the Affordable Care Act, aka as Obamacare.

But the Affordable Care Act is not the only law that employers must consider.  There are many other federal and state laws that may affect wellness programs, too.

For example only, the ADA will apply to many wellness programs.  The question is how.

The EEOC has stated that employers may conduct medical examinations and activities as part of a wellness program so long as the program is “voluntary.” The program is voluntary “so long as the employer neither requires participation nor penalizes employees who do not participate.”

However, the  EEOC has not provided guidance on what kind of financial incentives are permissible in order for the participation to be considered voluntary under the ADA.  For example only, the EEOC has not yet provided any guidance on whether there is any legal distinction between a financial incentive (premium discount) and a financial penalty (higher premium), even though both are functionally the same.  Nor has the EEOC provided any guidance on how steep the discount or higher premium may be and the program still be deemed voluntary.

Even if the wellness program is not voluntary, under the ADA, there is a bona fide benefit safe harbor.  At least one appellate court has held that the safe harbor applied to the wellness program at issue. Seff v Broward County.

The EEOC has issued no guidance on its position as to the potential application of the safe harbor to wellness programs that may be deemed involuntary.

In a public meeting last month on wellness programs, the EEOC failed to provide any guidance on the ADA issues addressed above.

In this regard, it should be noted that the ADA is not the only federal anti-discrimination law that applies to wellness programs.  For example only, GINA does, too.  The EEOC has provided some guidance in this area.

To make matters even more complicated, there are state laws that must be considered, too.  For example, not every state non-discrimination law has a safe harbor provision that is the same as or similar to the ADA

So proceed cautiously in this area.  The DOL regulations are a good starting point but should not be seen as a stopping point. There are additional steps that employers can take to minimize (not eliminate) their legal risks in this area. We are happy to assist.

This blog should not be construed as legal advice, as pertaining to specific factual situations or as establishing an attorney-client relationship.